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Refer to the provided table, which shows the ranked preferences of voters for three alternative projects, with 1 being the top preference. This situation illustrates the voting inconsistency where a majority of voters prefer The A) stadium over the park, the park over the jail, and the jail over the stadium. B) park and jail over the stadium, and the jail over the park. C) stadium over the jail, the jail over the park, and the park over the stadium. D) stadium and jail over the park, and the park over the jail. Refer to the provided table, which shows the ranked preferences of voters for three alternative projects, with "1" being the top preference. This situation illustrates the voting inconsistency where a majority of voters prefer The


A) stadium over the park, the park over the jail, and the jail over the stadium.
B) park and jail over the stadium, and the jail over the park.
C) stadium over the jail, the jail over the park, and the park over the stadium.
D) stadium and jail over the park, and the park over the jail.

E) B) and D)
F) A) and C)

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The so-called pork-barrel politics refers to congressional members


A) trading votes with one another.
B) receiving perks and freebies from businesses trying to sway their votes.
C) paying little attention to the vocal special-interest groups.
D) inserting provisions for local narrow projects into comprehensive legislation.

E) A) and B)
F) B) and C)

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"Government failure" is a prominent topic in


A) public choice theory.
B) Keynesian economics.
C) socialist theory.
D) behavioral economics.

E) A) and B)
F) All of the above

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Which of the following statements concerning a public good is false?


A) It is impossible to exclude nontaxpayers from the enjoyment of the public good.
B) All benefits associated with the production and use of a public good are received by the government.
C) The availability of a public good to one person simultaneously makes it available to all members of society.
D) The private sector does not have an economic incentive to produce a socially optimal amount of a public good.

E) A) and B)
F) A) and D)

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A government is considering undertaking a construction project of an increasing scale (ranging from 1, 2, 3, to 4) . The estimated marginal costs and marginal bene?ts of each successive scale of the project are given in the Table below.  Project  Marginal Cost  (in millions)   Marginal Benefit  (in millions)  1$8$11211133181742823\begin{array} { | c | c | c | } \hline \text { Project } & \begin{array} { c } \text { Marginal Cost } \\\text { (in millions) }\end{array} & \begin{array} { c } \text { Marginal Benefit } \\\text { (in millions) }\end{array} \\\hline 1 & \$ 8 & \$ 11 \\\hline 2 & 11 & 13 \\\hline 3 & 18 & 17 \\\hline 4 & 28 & 23 \\\hline\end{array} What is the total amount that the government should spend on the construction project to attain maximum net Bene?ts for the society?


A) $8 million
B) $14 million
C) $19 million
D) $37 million

E) A) and D)
F) None of the above

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When voters have different opinions about an issue, the position that is most likely to be adopted is that of the


A) lobbyist.
B) logroller.
C) rent seeker.
D) median voter.

E) A) and B)
F) A) and C)

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"Vote for my special local project and I will vote for yours." This political technique


A) illustrates the paradox of voting.
B) is called "logrolling."
C) illustrates the median voter model.
D) undermines the benefits-received principle.

E) None of the above
F) B) and C)

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Refer to the graphs which show demand curves reflecting the prices Alvin and Elmer are willing to pay for a public good, rather than do without it. The collective willingness to pay for the first unit of this public good is A) $18. B) $14. C) $10. D) $6. Refer to the graphs which show demand curves reflecting the prices Alvin and Elmer are willing to pay for a public good, rather than do without it. The collective willingness to pay for the first unit of this public good is


A) $18.
B) $14.
C) $10.
D) $6.

E) A) and D)
F) B) and C)

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The trading of votes to secure favorable outcomes on decisions that would otherwise be defeated is called


A) median-voter trading.
B) the special-interest effect.
C) political logrolling.
D) the paradox of voting.

E) C) and D)
F) B) and D)

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People enjoy outdoor holiday lighting displays and would be willing to pay to see them, but can't be made to pay. Because most people who put up lights are unable to charge others to view them, they don't put up as Many lights as people would like. This is an example of a


A) negative externality.
B) supply-side market failure.
C) demand-side market failure.
D) government failure.

E) A) and D)
F) A) and B)

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Refer to the provided table, which shows the ranked preferences of voters for three alternative projects, with 1 being the top preference. In a paired-choice vote between a park and a jail, A) a majority of the voters would favor the jail, 3 to 0. B) a majority of the voters would favor the park, 3 to 0. C) a majority of the voters would favor the jail, 2 to 1. D) a majority of the voters would favor the park, 2 to 1. Refer to the provided table, which shows the ranked preferences of voters for three alternative projects, with "1" being the top preference. In a paired-choice vote between a park and a jail,


A) a majority of the voters would favor the jail, 3 to 0.
B) a majority of the voters would favor the park, 3 to 0.
C) a majority of the voters would favor the jail, 2 to 1.
D) a majority of the voters would favor the park, 2 to 1.

E) B) and C)
F) A) and D)

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According to some economists, the private sector is more efficient than the public sector mainly because


A) the private sector has a clear test of performance: profit and loss.
B) wages, salaries, and fringe benefits are higher in the private sector.
C) worker turnover is higher in the public sector.
D) of extensive negative externalities in the public sector.

E) B) and D)
F) C) and D)

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Explain the special-interest effect.

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The special-interest effect is any polit...

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Suppose that Steve and Susie each perceive $200 of marginal benefit from a proposed new park, whereas Elizabeth perceives $800. If the proposed tax levied on each for the park would be $300, a majority vote will


A) defeat this project and resources will be underallocated to it.
B) defeat this project and resources will be efficiently allocated.
C) pass this project and resources will be underallocated to it.
D) pass this project and resources will be overallocated to it.

E) B) and D)
F) None of the above

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"Earmarks" refer to


A) the additional votes that must be taken when a voting paradox occurs.
B) taxes that redistribute wealth or income from one income group to another.
C) authorized expenditures benefiting a narrow, specifically designated group that are included in more comprehensive spending legislation.
D) legislation focused on correcting negative externalities.

E) A) and C)
F) None of the above

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What are the two characteristics that differentiate private goods from public goods?


A) rivalry and excludability
B) negative externality and positive externality
C) marginal cost and marginal benefit
D) ownership and usage

E) C) and D)
F) All of the above

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Why are the public sector and private sector "imperfect institutions"?

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The view of a benevolent government that...

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The free-rider problem makes a good highly profitable for a private firm to provide.

A) True
B) False

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Unlike a private good, a public good


A) has no opportunity costs.
B) has benefits available to all, including nonpayers.
C) produces no positive or negative externalities.
D) is characterized by rivalry and excludability.

E) All of the above
F) A) and B)

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Some people argue that the three main television networks all have similar programming. If true, this observation might best be explained by the


A) paradox of voting.
B) median-voter model.
C) law of diminishing marginal utility.
D) ability-to-pay principle.

E) A) and B)
F) A) and C)

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